Reply To: Inept Government

[Bucksiron]

Anyone who believes Biden is doing a good job just has to look at his approval ratings. They’ve recovered a bit recently but are still woeful and reflect the damage he’s done to the cost-of-living in the States. What’s saved the USA from even worse problems is the fact they’re not reliant on imported energy, although Biden’s doing his best to destroy that as well.

Regarding the UK, I completely agree it’s a shambles. But is anyone on here prepared to admit why? The two biggest reasons by a long way are energy costs and post-pandemic supply problems. Of course, the usual suspects will no doubt blame Putin and Brexit, both of which will have played a part but Putin simply took advantage of a situation created by daft net-zero targets while the opportunities offered by Brexit are yet to be fully realised.

I’m not supporting the Tories in any of this. Boris screwed up massively with far too much emphasis on renewables, which though desirable in the long-term are nowhere near ready to replace our energy needs, while he should have come out of lockdowns far sooner. Yet again the so-called ‘experts’, in this case health scientists and computer modellers, have been proved to be totally and utterly wrong. The key point here is that all of these things were fully supported by Labour and Starmer even wanted to extend the lockdowns.

Getting back to the mini-budget, there’s no doubt it was poorly managed but what Truss and Kwarteng are doing is fundamentally right. The idea that markets reacted badly because taxes for higher earners were reduced makes absolutely no sense because the amounts involved are small. What the markets have been unhappy about is the use of debt to fund the growth and the government’s commitment to support consumers on energy costs, which have been conveniently ignored by many commentators. There’s also no question that markets will have exploited the situation by shorting the pound.

As I’ve said before and will repeat, Truss and Kwarteng need to stand firm. Of course they need to do more to bring the markets onside and it would also help if the BoE had been more aggressive in raising interest rates higher and sooner. At least the Bank stepped in yesterday and it might have to do so again as it’s going to be a bumpy ride. Of course this will affect people with mortgages, but interest rates are still far, far lower than they were not that long ago; and, again as I’ve said before this will help savers who have had no support for far too long.

Finally, Labour needs to be careful what it wishes for. The world’s in a difficult place at the moment and the idea that Starmer could wave a magic wand is fanciful to say the least.